Krist says Ricketts’ online sales tax delay costs state

July 31, 2018

Gov. Pete Ricketts’ decision to delay collection of sales taxes on internet purchases until 2019 will cost the state tens of millions of dollars of revenue that could have been used to help fund property tax relief, Democratic gubernatorial nominee Bob Krist said.

Ricketts did not support legislation earlier this year that would have cleared the way for collection of those taxes already owed on internet purchases to begin, Krist said, “and now he compounds that terrible decision by delaying collection of taxes until January.”

A recent U.S. Supreme Court decision opened the way for collection of online sales taxes by tossing out an earlier ruling that limited such taxes to retailers with a physical presence in the state.

Responding to Krist, Ricketts campaign communications director Matthew Trail said the governor “has been clear” in calling for the new revenue to be committed to property tax relief and that his administration is “working to comply with the Supreme Court’s ruling the right way.”

Krist, he said, is “rushing to impose (the online sales tax) on Nebraskans before 2018 back-to-school and Christmas shopping (after) voting against online sales tax collection in March” as a state senator.

The Nebraska Department of Revenue announced last week that it would give online retailers until 2019 to begin collecting the taxes, and the governor has said he sees no reason to summon a special session of the Legislature to begin collecting that revenue now.

“That’s tens of million of dollars that could have been used to relieve the skyrocketing property taxes on Nebraska farmers, ranchers and homeowners,” Krist said.

Krist said Ricketts “continues to prove he’s not up to the job of leading our way out of the worst property tax crisis in the history of the state.”

Meanwhile, Sen. Burke Harr of Omaha questioned the Department of Revenue’s authority to declare that it will not seek to collect sales taxes from sellers with $100,000 or less in sales or fewer than 200 separate transactions in the state annually.

That position is consistent with the recent U.S. Supreme Court decision, but Harr said the department does not have the authority to issue that ruling.

“We (state senators) are the policymakers, not the Department of Revenue,” he said.

Harr said that heightens the need to call a special session of the Legislature to deal with the issue.

“We can clean this up very quickly,” he said.

Without a special session, Krist said, the governor’s inaction will mean that the state will be “forfeiting tens of millions of additional dollars in internet sales tax from holiday shoppers.”

“That’s not only poor leadership; it’s negligent,” he said.

Under state law, Nebraska taxpayers are expected to report sales taxes owed for online purchases on their tax returns if they are not collected by sellers, but few taxpayers do.

Sen. John McCollister of Omaha has acquired the signatures of 10 senators, the number required to prompt a survey of all senators to decide whether to summon the Legislature back to Lincoln to resolve the issue this year.

At least 33 senators would need to agree in order to convene a special session.

While it makes sense to collect taxes that already are legally owed, McCollister said, “the real issue is fairness for Nebraska retailers” who must collect sales taxes on purchases at their stores.

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